Surcharges cost Brits around £166 million a year but today’s ban will make it unlawful for retailers to charge these fees.

The new rules will be enforced by Trading Standards who will have the power to take civil enforcement action against traders who breach the regulations.

Customers are also entitled to receive a refund if they are hit by any unlawful surcharge, and can take legal action to recover the money.

Consumers are set to be protected (Picture: Damien Meyer/AFP/Getty Images)

Economic Secretary to the Treasury, John Glen said: ‘It’s completely unfair for someone to be hit by a hidden fee just before they are about to make a purchase, so by scrapping these rip-off charges we are helping to give power back to the consumer.

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‘As we build a fairer society, this added transparency ensures buyers can make informed choices about how they spend their hard-earned money.’

The revised Payment Services Directive (PSD2) aims to modernise Europe’s payment services to the benefit of both consumers and businesses.

Valdis Dombrovskis, Vice-President responsible for Financial Stability, Financial Services and Capital Markets Union said: ‘This legislation is another step towards a digital single market in the EU. It will promote the development of innovative online and mobile payments, which will benefit the economy and growth.

‘With PSD2 becoming applicable, we are banning surcharges for consumer debit and credit card payments. This could save more than €550 million per year for EU consumers. Consumers will also be better protected when they make payments.